Latest / CBT Live / FTC Pricing FAQs, GM Misses Hybrid Boom, Toyota's David Christ (09.16.26)

Transcript

FTC Pricing FAQs, GM Misses Hybrid Boom, Toyota's David Christ (09.16.26) · CBT Live

• 0:24
  SPEAKER_03: Hey everyone, welcome into another edition of CBT Live, right here at the CBT Automotive Network.
• 0:30
  SPEAKER_03: Today is Wednesday, September 16th.
• 0:32
  SPEAKER_03: I am Jim Fitzpatrick.
• 0:33
  SPEAKER_03: And I am Virgin Fitzpatrick.
• 0:35
  SPEAKER_03: That's right.
• 0:35
  SPEAKER_03: And it's gonna be we've got a great show.
• 0:37
  SPEAKER_01: We do.
• 0:37
  SPEAKER_01: Thanks for joining us, everybody.
• 0:38
  SPEAKER_01: Coming up, we'll be joined by Glenn Trafford, General Manager of Salmon Arm Toyota.
• 0:43
  SPEAKER_01: And then we'll welcome Kevin Roberts, Director of Economic and Market Intelligence at Car Gurus.
• 0:49
  SPEAKER_01: But first, I would like to thank today's sponsor is Radar by Auto AI.
• 0:54
  SPEAKER_01: Keeping up with advertising compliance can be a full-time job.
• 0:57
  SPEAKER_01: Radar by Auto AI helps make it easier.
• 1:00
  SPEAKER_01: Radar monitors your VDPs and meta-ads for pricing and disclosure issues, flags potential compliance risks, and can even keep an eye on what your competitors are doing.
• 1:10
  SPEAKER_01: Protect your dealership and stay ahead with Radar by Auto AI.
• 1:14
  SPEAKER_03: That's right.
• 1:14
  SPEAKER_01: Yep.
• 1:15
  SPEAKER_03: Great company.
• 1:16
  SPEAKER_01: Yeah.
• 1:17
  SPEAKER_01: So before we get into the news stories.
• 1:19
  SPEAKER_03: Yeah.
• 1:20
  SPEAKER_03: So you as all of you know that watch each day and thank you for watching.
• 1:23
  SPEAKER_03: And uh tell others in the industry to watch as well.
• 1:26
  SPEAKER_03: We are our uh viewership is growing very, very quickly, which we're very happy with.
• 1:30
  SPEAKER_03: We really appreciate all of you.
• 1:31
  SPEAKER_03: I think this is only our we're in the middle of our fourth week of uh broadcasting.
• 1:35
  SPEAKER_01: Yes, hundreds of thousands of views, so we really appreciate all the support.
• 1:39
  SPEAKER_03: Yes, thank you so much.
• 1:40
  SPEAKER_03: Um, but you guys know I love uh funny videos, funny uh the the I I think you know the people in the auto industry are a fun bunch anyway.
• 1:48
  SPEAKER_03: So when you put a camera in their hand and they and you say, here, go out and shoot some some funny stuff, and uh and it's been working very, very well.
• 1:55
  SPEAKER_03: Uh but take a look at this one that I came across.
• 1:57
  SPEAKER_03: I I I got a chuckle out of this.
• 1:59
  SPEAKER_03: You gotta read it though.
• 2:00
  SPEAKER_03: Gotta read, so stay pay attention.
• 2:02
  SPEAKER_03: Okay.
• 2:02
  SPEAKER_03: Go ahead and show that.
• 2:04
  SPEAKER_02: We have a Spanish-speaking crew here, and Ryan's gonna help us out.
• 2:09
  SPEAKER_02: We have the best inventory, best team, and best facilities in the Philadelphia area.
• 2:17
  SPEAKER_02: So make sure you get down to Patriot Dealership so we can get you in your next ride.
• 2:27
  SPEAKER_02: Exactly.
• 2:30
  SPEAKER_01: That's cute.
• 2:30
  SPEAKER_01: So some of that I didn't have to read actually.
• 2:32
  SPEAKER_01: That's right, yeah.
• 2:33
  SPEAKER_03: Oh, you did because you knew you do Spanish.
• 2:37
  SPEAKER_03: Wow.
• 2:38
  SPEAKER_03: My wife is multi-talented.
• 2:40
  SPEAKER_03: Anyway.
• 2:41
  SPEAKER_03: Multilingual, at the very least.
• 2:43
  SPEAKER_03: But I thought that was funny.
• 2:44
  SPEAKER_03: I just got a chuckle out of that when I saw it.
• 2:46
  SPEAKER_03: That was funny.
• 2:47
  SPEAKER_03: Poor kid didn't know what the guy was saying, Oh, anyway, that was a good one.
• 2:51
  SPEAKER_03: Yes.
• 2:52
  SPEAKER_03: What a good two some new stories?
• 2:53
  SPEAKER_01: Yeah, let's go ahead.
• 2:54
  SPEAKER_01: Okay.
• 2:54
  SPEAKER_01: Okay.
• 2:55
  SPEAKER_01: We do have another clip we're gonna show later on in the show, and Jim's gonna have a few comments on it.
• 2:59
  SPEAKER_01: It's less of a funny one and more of a um an educational one.
• 3:02
  SPEAKER_01: So um, but today's stories.
• 3:04
  SPEAKER_01: GM dealers are missing out on the hybrid boom.
• 3:08
  SPEAKER_01: So there was a recent report from Reuters that talked about hybrids accounted for 19% of U.S.
• 3:13
  SPEAKER_01: retail vehicle sales in August as more consumers look for better fuel economy without making the move to a fully electric vehicle.
• 3:21
  SPEAKER_01: But for GM, they only have one.
• 3:26
  SPEAKER_03: Which one is that, Bridget?
• 3:27
  SPEAKER_01: The Corvette.
• 3:28
  SPEAKER_03: That's crazy.
• 3:29
  SPEAKER_01: So it's really, really interesting.
• 3:31
  SPEAKER_01: Um, there was a Florida dealer, Bill Wallace, told Reuters that the majority of his customers are coming into stores lately asking for hybrids.
• 3:38
  SPEAKER_01: We all know that this is happening.
• 3:40
  SPEAKER_01: His Hyundai, Kia, and Mazda stores all have hybrid options, but his Chevy and Cadillac stores largely don't.
• 3:46
  SPEAKER_01: That's right.
• 3:47
  SPEAKER_01: So I thought that was really interesting.
• 3:48
  SPEAKER_01: They do make an Equinox um hybrid, but it's only sold in China.
• 3:52
  SPEAKER_01: So um Wait, China.
• 3:54
  SPEAKER_03: So GM cars are being sold in China?
• 3:57
  SPEAKER_03: Don't don't get me started.
• 3:59
  SPEAKER_03: So that that's uh that's very interesting.
• 4:00
  SPEAKER_03: That wow, so GM really missed the boat on that.
• 4:04
  SPEAKER_01: That's yeah, and they do say that they're coming, um said hybrids are coming to important segments, but the company has not given a timetable of when that's that's gonna happen.
• 4:13
  SPEAKER_03: They you know they went so deep on on EVs.
• 4:16
  SPEAKER_03: Yeah.
• 4:16
  SPEAKER_03: And they were like, okay, we're all in on EVs, that's gonna be the future, that's gonna be the way people will be driving.
• 4:21
  SPEAKER_03: Right.
• 4:21
  SPEAKER_03: And I think they just just must have jumped right over hybrids.
• 4:25
  SPEAKER_03: But Toyota, on the other hand, who is like knocking at their back door in terms of sales for the US, um, they did go in on hybrids, and that seemed to have paid off very, very well.
• 4:36
  SPEAKER_03: Good move for Toyota, which by the way, I have got an interview with uh David Christ, who is the uh vice president general manager of Toyota Motor Sales, and um they've got their big dealer meeting.
• 4:47
  SPEAKER_03: I think it's today, actually, and uh there's a picture of him.
• 4:50
  SPEAKER_03: Great guy.
• 4:51
  SPEAKER_03: Uh and uh that interview will be released today.
• 4:54
  SPEAKER_03: Yeah so check that out at cbtnews.com.
• 4:57
  SPEAKER_03: David Christ from Toyota.
• 4:59
  SPEAKER_01: Exclusive here on CBT News at 4 p.m.
• 5:02
  SPEAKER_01: today.
• 5:02
  SPEAKER_01: So yeah.
• 5:03
  SPEAKER_01: Um, some more news.
• 5:04
  SPEAKER_01: Uh the FTC has released of uh FAQs um for everything that's going on.
• 5:10
  SPEAKER_01: The Federal Trade Commission just released guidance clarifying vehicle pricing and advertising requirements.
• 5:16
  SPEAKER_01: Um we have all of this linked on cbtnews.com um and the article there.
• 5:21
  SPEAKER_01: Um very, very important.
• 5:22
  SPEAKER_01: A lot of the the questions are talking about how to handle the rebates and conditional discounts and installed options and add-ons and all of those things.
• 5:30
  SPEAKER_03: So um here it is once again.
• 5:32
  SPEAKER_03: This this FTC thing, folks, is not going away.
• 5:35
  SPEAKER_03: You guys hear us talk a lot about it.
• 5:37
  SPEAKER_03: I've rung the butt bell as many times as we possibly can about this situation.
• 5:42
  SPEAKER_03: We had an incredible conference in Washington, D.C.
• 5:45
  SPEAKER_03: with Senator Bernie Moreno and many others in the industry to talk about this very issue.
• 5:50
  SPEAKER_03: Uh however, there seems well, there it is.
• 5:52
  SPEAKER_03: There's the logo right there, the Auto Leadership Summit.
• 5:54
  SPEAKER_01: It was a great conference, very important, very timely.
• 5:57
  SPEAKER_01: And um, if you missed some of those panels, we did recaps on all of those.
• 6:01
  SPEAKER_01: You can go to cbtnews.com and you could go to the events tab and it's under Auto Leadership Summit, which is um has a lot of information there if you missed the summit.
• 6:09
  SPEAKER_03: Yeah, we had a lot of great speakers, and uh, but it as I said, it's not going away.
• 6:14
  SPEAKER_03: Um and uh and in in fact, it's funny, our our sponsor this week is is Radar.
• 6:20
  SPEAKER_03: Um, they've come up with a program that actually addresses this in a very powerful way and for a very nominal fee.
• 6:27
  SPEAKER_03: I think it's like 299 bucks a rooftop for a dealer to sleep better at night to say, okay, I know all of my ads and all everything that's on my website is compliant.
• 6:38
  SPEAKER_03: Right.
• 6:38
  SPEAKER_03: Uh it's just I'm so glad we found that company and uh and are able to feature them here because they're doing great work for dealers all over the country.
• 6:46
  SPEAKER_03: Check them out, by the way.
• 6:47
  SPEAKER_03: Radar.
• 6:47
  SPEAKER_03: That's right.
• 6:48
  SPEAKER_03: So radarai.inc, I think it is.
• 6:50
  SPEAKER_03: I think so too.
• 6:51
  SPEAKER_03: So yeah.
• 6:52
  SPEAKER_03: But don't quote me on that.
• 6:54
  SPEAKER_01: All right, today we are taking a look at the car business from the Canadian side and how the latest tariffs are affecting dealers and consumers.
• 7:02
  SPEAKER_03: That's right.
• 7:03
  SPEAKER_03: Glenn Trafford, who's the general manager of Salmon Arm Toyota in British Columbia, Canada, joins us now live to talk about this very issue.
• 7:11
  SPEAKER_03: So, uh Glenn, before we jump in, how's business at your store up there in Canada?
• 7:17
  SPEAKER_04: Uh good morning.
• 7:18
  SPEAKER_04: Good morning.
• 7:20
  SPEAKER_04: I uh business is awesome.
• 7:22
  SPEAKER_04: We are uh we are experiencing an all-time uh record year for us.
• 7:29
  SPEAKER_03: So wow, that's great.
• 7:31
  SPEAKER_03: Congrats.
• 7:32
  SPEAKER_03: Congrats.
• 7:32
  SPEAKER_03: That that is fantastic.
• 7:34
  SPEAKER_03: Why do you think you're having such a great year?
• 7:37
  SPEAKER_04: Well, we we bought this store in November of 2023.
• 7:41
  SPEAKER_04: Um it was uh already uh a really good store.
• 7:46
  SPEAKER_04: Okay.
• 7:46
  SPEAKER_04: So I uh I was able to inherit um a staff with an average tenure of over a decade.
• 7:54
  SPEAKER_03: Wow, that's that's good.
• 7:56
  SPEAKER_03: You you guys in Canada don't don't turn the sales force quite as fast as we do here in the in the states.
• 8:02
  SPEAKER_04: Um I'm I'm not sure that's entirely true.
• 8:04
  SPEAKER_04: I think this store is a bit of an anomaly.
• 8:06
  SPEAKER_04: Okay.
• 8:08
  SPEAKER_04: But uh uh it we could probably credit Toyota a little bit.
• 8:13
  SPEAKER_04: It's uh it's a pretty good uh brand to sell.
• 8:16
  SPEAKER_03: It is a great brand to sell, that's for sure.
• 8:18
  SPEAKER_04: There's no and uh so overall our I think our success comes because we have tenured people, we we we have a process and we introduced a thing that we call good different.
• 8:31
  SPEAKER_04: Um I I started in the car business about 35 years ago.
• 8:38
  SPEAKER_04: And uh when I started, uh I had some bosses that were like great, and I had a few that weren't so great.
• 8:48
  SPEAKER_04: Um so so I decided when I became the boss that I'd try to be the boss that that uh I wished I'd had.
• 8:55
  SPEAKER_03: There you go.
• 8:56
  SPEAKER_03: Nice.
• 8:56
  SPEAKER_03: That's that's a good uh that's kind of a good North Star right there.
• 9:00
  SPEAKER_03: No question about it.
• 9:01
  SPEAKER_01: That's right.
• 9:02
  SPEAKER_01: So talk to us a little bit about what good different is.
• 9:05
  SPEAKER_01: How what is that like in practice at your store?
• 9:08
  SPEAKER_04: So we we tend to um do things a little differently.
• 9:13
  SPEAKER_04: I we I extended the idea of good different from just employees to to employees and customers in about 2012 when when we adopted the idea that could we be the dealership that customers wish to be were?
• 9:29
  SPEAKER_04: Um so we say yes a lot.
• 9:32
  SPEAKER_04: We create job descriptions for people that address their talent instead of our desire for them to do a thing that maybe they're not good at.
• 9:40
  SPEAKER_03: Give us an example on that.
• 9:42
  SPEAKER_04: So in inside our store, we try to um pay our people better by having them do more of what they're good at, and uh the only way to do that is to not keep two people with the same title doing the same thing.
• 9:58
  SPEAKER_04: Okay so for example, uh we've had times where one of the managers is maybe really good on the phone and another is really good in person.
• 10:09
  SPEAKER_04: Uh perhaps another is good with statistics and so on.
• 10:13
  SPEAKER_04: So all three might share the same title, but one of them will do exactly um a hundred percent of the phone calls, one will do a hundred percent of data collection, one will do a hundred percent of customer uh facing interaction.
• 10:32
  SPEAKER_04: Um when you're tasked with, I and I I think I'm like this.
• 10:38
  SPEAKER_04: When I'm tasked with a thing that I'm good at, it's easy, it's enjoyable, I look forward to it, I believe I'll be successful, and consequently we see our people going from being great to being, you know, world beaters, yeah.
• 10:54
  SPEAKER_04: The best of the best.
• 10:55
  SPEAKER_03: Yeah, that's great.
• 10:57
  SPEAKER_03: Good idea.
• 10:58
  SPEAKER_01: So let's talk about tariffs for a minute.
• 11:00
  SPEAKER_01: Um Canada's latest retaliatory tariffs on US goods took effect September 8th.
• 11:05
  SPEAKER_01: How um has that had much impact on your business?
• 11:10
  SPEAKER_04: You know, I I I think that uh the answer is yes and no.
• 11:15
  SPEAKER_04: Um directly we we're not seeing the immediate instant impact.
• 11:22
  SPEAKER_04: I I'm not even sure what that would look like.
• 11:25
  SPEAKER_04: But but um the yes is Canadians are weirded out by this whole thing.
• 11:32
  SPEAKER_04: We we don't understand what's happening.
• 11:35
  SPEAKER_04: Um our relationship didn't begin you know January 1st of 2026.
• 11:42
  SPEAKER_04: Um and consequently we we're now sitting watching, going, why is this happening?
• 11:50
  SPEAKER_03: Yeah, and you're not alone.
• 11:52
  SPEAKER_03: Yeah, that's quite us are a little weirded out as well.
• 11:54
  SPEAKER_01: Exactly.
• 11:54
  SPEAKER_03: I was gonna say it's quite a few Americans that are kind of weirded out by this too, wondering where did this all come from?
• 12:01
  SPEAKER_04: Well, but um I think uh certainly our manufacturer, Toyota, has decided to hold the line.
• 12:09
  SPEAKER_04: Yeah, that they've absorbed uh virtually 100% of the cost to the consumer um going going south, and that's uh you know a cost in the billions.
• 12:20
  SPEAKER_03: Yeah, for sure.
• 12:21
  SPEAKER_04: Um but our biggest um thing to stumble over is is the the whole idea that what if we decided to act like the neighbors we've been instead of this sort of strange political environment that that we're in?
• 12:41
  SPEAKER_04: So I I I think it's a it's a hesitation, and we want to do the right thing to create the right environment so that we get resolution.
• 12:51
  SPEAKER_03: Okay, okay.
• 12:52
  SPEAKER_03: What are you uh do you hear what are you hearing from the from the consumers or the car shoppers that come in to your store?
• 12:58
  SPEAKER_03: Is this an issue with them and what sort of comments are they making about this?
• 13:02
  SPEAKER_04: Well, I I think some of the success that we're having uh as a Toyota dealer comes because Toyota is the number one manufacturer of vehicles in Canada.
• 13:13
  SPEAKER_04: Okay.
• 13:14
  SPEAKER_04: Um, so it's probably the reverse effect.
• 13:17
  SPEAKER_04: Now we're we're part of a dealer group with 14 dealerships in Canada and and seven dealerships in the US.
• 13:24
  SPEAKER_04: Okay.
• 13:24
  SPEAKER_04: So the the environment amongst different manufacturers is certainly um uh affecting their customers more.
• 13:34
  SPEAKER_04: Like some of our dealers aren't getting the cars that they used to get because of tariffs.
• 13:40
  SPEAKER_04: Uh Mazda has pulled back.
• 13:42
  SPEAKER_04: Yeah.
• 13:43
  SPEAKER_04: Um Chrysler is taking a super interesting path towards Canada.
• 13:49
  SPEAKER_04: Um and um consumers, I think, are up here are reacting to that um uh approach by uh um either waiting or or or punishing those manufacturers.
• 14:02
  SPEAKER_03: Sure.
• 14:03
  SPEAKER_03: Dealers in the US, um the Toyota dealers in the US have about a 12-day supply of cars right now.
• 14:08
  SPEAKER_03: What does it look like in Canada?
• 14:10
  SPEAKER_04: We are 19 consecutive months into ending with three or less vehicles on the ground.
• 14:16
  SPEAKER_04: Oh my gosh.
• 14:17
  SPEAKER_04: Wow, that's incredible.
• 14:18
  SPEAKER_04: So we we're a smaller store, yeah, but we sell through we have about a 92-93% sell through.
• 14:26
  SPEAKER_03: Okay, yeah.
• 14:27
  SPEAKER_03: Wow, talk about efficient.
• 14:29
  SPEAKER_03: That's that's pretty good.
• 14:30
  SPEAKER_03: Yeah.
• 14:30
  SPEAKER_03: How's fixed ops?
• 14:32
  SPEAKER_04: You know, we we have uh had some incredible growth uh in our fixed operation.
• 14:40
  SPEAKER_04: It is uh um it's lovely to watch customers uh hang on to their cars a little longer.
• 14:47
  SPEAKER_04: Our relationship with the people in our car park is is strong.
• 14:52
  SPEAKER_04: Yeah, and uh it has fueled us last month's uh August, which for us is uh traditionally a little weaker, was the second strongest month of the last 36.
• 15:07
  SPEAKER_03: Wow, that's great.
• 15:08
  SPEAKER_03: That's great.
• 15:08
  SPEAKER_03: Now, uh in the US, um the average length of a vehicle on the road is a little over 12 years.
• 15:14
  SPEAKER_03: What is it?
• 15:14
  SPEAKER_03: What is that in Canada?
• 15:17
  SPEAKER_04: Yeah, I I I would argue it's uh for certainly for Toyotas, it's similar.
• 15:22
  SPEAKER_03: Okay.
• 15:23
  SPEAKER_04: The a typical trade cycle up here is somewhere between you know five and eight years.
• 15:28
  SPEAKER_04: Um the you you you'll see a like we have a thing at our store uh called the high kilometer club, or maybe the high mile club if it were south of the border.
• 15:39
  SPEAKER_04: Um and uh that club is people who have 250,000 kilometers or more.
• 15:45
  SPEAKER_04: Okay.
• 15:46
  SPEAKER_04: So we continue to service those vehicles for those people, and we have events and and stuff that you know rewards people for hanging on to their car.
• 15:56
  SPEAKER_03: Oh, that's pretty cool.
• 15:57
  SPEAKER_03: Yeah, that's really cool.
• 15:58
  SPEAKER_03: Yeah.
• 15:59
  SPEAKER_03: Wow, we gotta we have to get up there to uh Canada.
• 16:01
  SPEAKER_01: Oh, I was I was looked at Salmon Arm before we started talking, Glenn, and it's so beautiful.
• 16:06
  SPEAKER_01: I was like, why couldn't we do this interview there?
• 16:08
  SPEAKER_04: Yeah, well, you are certainly welcome to come here.
• 16:13
  SPEAKER_04: We claim that we live inside a postcard.
• 16:16
  SPEAKER_03: It really looks like it from all the all that I saw.
• 16:19
  SPEAKER_03: Maybe maybe the C in CBT is like Canada, you know, instead of car business, you know.
• 16:24
  SPEAKER_01: Right, there you go.
• 16:25
  SPEAKER_03: So there you go.
• 16:26
  SPEAKER_03: It's beautiful.
• 16:27
  SPEAKER_03: We appreciate all your time.
• 16:28
  SPEAKER_03: Uh best of luck to you.
• 16:29
  SPEAKER_03: Congratulations on all your success.
• 16:31
  SPEAKER_03: And uh thanks for for allowing us to check in with you.
• 16:33
  SPEAKER_03: Yeah, thanks, Glenn.
• 16:34
  SPEAKER_03: Yep.
• 16:35
  SPEAKER_03: It was great to meet you guys and okay, take care.
• 16:38
  SPEAKER_03: Thanks.
• 16:40
  unknown: Nice.
• 16:40
  SPEAKER_01: Yeah, it really was.
• 16:41
  SPEAKER_01: It's beautiful.
• 16:42
  SPEAKER_01: Might be a place we go vacation sometime.
• 16:44
  SPEAKER_01: That's right.
• 16:44
  SPEAKER_01: That's right.
• 16:45
  SPEAKER_01: And we would stop and see Glenn while we're there.
• 16:47
  SPEAKER_03: Huh?
• 16:47
  SPEAKER_01: We'll stop and see Glenn while we're there.
• 16:49
  SPEAKER_03: We'll see Glenn.
• 16:49
  SPEAKER_01: That's right.
• 16:50
  SPEAKER_03: We'll go fishing or something.
• 16:51
  SPEAKER_01: Why not?
• 16:52
  SPEAKER_01: Right?
• 16:52
  SPEAKER_03: That's right.
• 16:53
  SPEAKER_03: Yeah.
• 16:53
  SPEAKER_03: I think our son just went fishing up there in Canada.
• 16:55
  SPEAKER_01: He did, yeah.
• 16:56
  SPEAKER_01: He was, I can't remember exactly, somewhere near there.
• 16:59
  SPEAKER_03: But no, that you know, it's it's interesting because like he just said, we don't know what's going on with you guys down there, or with I shouldn't say that, but with the tariffs, where's this all coming from right now?
• 17:08
  SPEAKER_03: And we feel the same way.
• 17:10
  SPEAKER_03: I know I'm I know I'm painting with a broad brush, and there's a lot of people that support this, and uh, you know, whatever is you know the White House wants to do, we're behind, and that's great.
• 17:19
  SPEAKER_03: I totally respect that.
• 17:20
  SPEAKER_03: But we for the most part, I think it's safe to say we don't know where this whole incredible strong tariff thing is coming from.
• 17:28
  SPEAKER_03: Right.
• 17:28
  SPEAKER_03: And these tariffs that we're imposing on on our friends to the north there.
• 17:32
  SPEAKER_03: And uh, you know, it's just it's just unfortunate.
• 17:35
  SPEAKER_03: You know, it's again, it adds to the uncertainty in the economy that we've been dealing with now for the last couple of years that we just don't need.
• 17:43
  SPEAKER_03: You know, you put that, you put the war, you put the gas prices, you've it's just like enough already.
• 17:48
  SPEAKER_03: What are we doing?
• 17:49
  SPEAKER_01: And I think he speaks for probably a lot of Canadians where he said we're kind of a little weirded out, like what's going on, and can Canadians and Americans have to do so.
• 17:57
  SPEAKER_03: That's right.
• 17:58
  SPEAKER_03: Yeah, no question about it.
• 17:59
  SPEAKER_01: So anyway, yeah, anyway.
• 18:01
  SPEAKER_03: Okay, the auto market is showing some uh interesting shifts as uh we've uh head into fall, which is by the way, head into fall, I should say that's just like six days away.
• 18:10
  SPEAKER_01: It's very close.
• 18:11
  SPEAKER_01: Yes, heads.
• 18:15
  SPEAKER_01: It's crazy.
• 18:16
  SPEAKER_01: But Car Gurus just released its August Intelligence Report, and Kevin Roberts is here to break down what the latest data is telling us.
• 18:23
  SPEAKER_01: Welcome to the show.
• 18:24
  SPEAKER_05: Hey, thanks for having me.
• 18:26
  SPEAKER_05: Yeah, sure.
• 18:27
  SPEAKER_01: So talk to us about what stood out the most um in the report.
• 18:31
  SPEAKER_05: Yeah, so um the the biggest kind of headline that uh we were keeping an eye on is the missing amount of 2027 model year vehicles, uh at least compared to what we've seen over the previous years of the number of uh expected vehicles you see out there.
• 18:46
  SPEAKER_05: So that was a surprise, and then continued strength in the used vehicle market continues to be uh bellwether trend that we've seen uh consistently throughout this year.
• 18:55
  SPEAKER_05: Yeah.
• 18:56
  SPEAKER_03: So used is outperforming.
• 18:58
  SPEAKER_03: Um uh demand is up by 2.3% uh year over year, uh, continuing a steady level of growth over the past several months.
• 19:07
  SPEAKER_03: Talk to us about that.
• 19:09
  SPEAKER_05: Yeah, it's it's a continuation of a trend we've been seeing for a while, as you mentioned, and I think it's a couple different interesting factors going on there where the growth is coming from, and it's coming from both ends of the spectrum of age when you look at the used vehicle market.
• 19:22
  SPEAKER_05: So we're seeing a lot of growth in younger used vehicles, so the one to two-year-old vehicles.
• 19:28
  SPEAKER_05: And so the thought is that we're seeing consumers maybe price out of the new vehicle market, moving over to the used vehicle market and finding a nearly new used vehicle.
• 19:36
  SPEAKER_05: You know,$30,000,$35,000 price point could be a major growth factor there.
• 19:41
  SPEAKER_05: And then we're also seeing a lot of growth at the other end of the spectrum, so eight plus year old used vehicles.
• 19:46
  SPEAKER_05: And that's just consumers looking for a much more affordable vehicle out there.
• 19:49
  SPEAKER_05: So affordability is done a long-term trend that's been impacting the industry and one that's gonna continue impacting it probably as we see interest rates, gas prices, everything increasing now.
• 19:59
  SPEAKER_03: If we could only build more used cars at$35,000, then we wouldn't have this affordability problem.
• 20:06
  SPEAKER_05: We used to call those uh it's only if we could go back in time and rebuild all the vehicles we missed during the chip shortage, right?
• 20:13
  SPEAKER_05: That would really help out the situation.
• 20:14
  SPEAKER_05: That's exactly right.
• 20:16
  SPEAKER_03: We used to call those um uh switch cars.
• 20:19
  SPEAKER_03: So somebody would come in on a new car, you know, and then you'd have in mind a good switch car which might be two years old to go because they get that sticker shock or they couldn't afford the payment or whatever, and you would just pull right up to the door, the two-year-old car that's in many cases a CPO vehicle, and they go down the road very, very happy.
• 20:36
  SPEAKER_03: It's a nice backpack.
• 20:37
  SPEAKER_03: So, yeah, yeah.
• 20:38
  SPEAKER_01: So let's go to the new market side.
• 20:40
  SPEAKER_01: Demand is softer and inventory is tighter.
• 20:42
  SPEAKER_01: Talk to us about that.
• 20:44
  SPEAKER_05: Yeah, it it's it's been an interesting trend.
• 20:46
  SPEAKER_05: We expected 2026 to potentially be a down year for the new market slightly because of the pull-ahead volume we saw in 2025 due to tariffs when consumers are very you know concerned about tariffs impacting vehicle prices.
• 20:59
  SPEAKER_05: And so it's largely gone along how we expected.
• 21:03
  SPEAKER_05: Uh, so slight softness there.
• 21:05
  SPEAKER_05: Um, overall, no major shifts there.
• 21:07
  SPEAKER_05: But as I mentioned, the kind of missing 2027 model year vehicles compared to what we saw over previous years.
• 21:13
  SPEAKER_05: Last three years, roughly around this at the end of August, about 25% of all inventory would have been that next model year vehicle.
• 21:22
  SPEAKER_05: Uh, and then this year it was only around like half of that, so around 12.5%.
• 21:26
  SPEAKER_05: And so that's that's definitely been an interesting trend that we've been keeping an eye on.
• 21:30
  SPEAKER_05: Overall, inventory levels are flat from where they were a year ago, so it's not like it's inventory's really shifted.
• 21:35
  SPEAKER_05: It's through the mix of where those inventory vehicles are, has been a major kind of uh shift there.
• 21:40
  SPEAKER_03: Yeah, in fact, despite a slowdown in retail sales, nearly 4% year over year, the total inventory has declined in August to its lowest level, right?
• 21:50
  SPEAKER_05: Is that yeah, and so it's it's at the same level from where it was a year ago, but I think it's automakers are really trying to balance out the mix of you know, do you want to put on a lot of Next gen model year vehicles right now when inventory levels are flat from a year-over-year basis.
• 22:04
  SPEAKER_05: So it's an interesting balancing act I think we're seeing in the market right now.
• 22:08
  SPEAKER_03: Yeah, for sure.
• 22:09
  SPEAKER_03: Yeah.
• 22:10
  SPEAKER_03: Go ahead.
• 22:10
  SPEAKER_01: Yeah.
• 22:11
  SPEAKER_01: So we talked a little bit about consumer interest in affordable vehicles.
• 22:14
  SPEAKER_01: Can they continue to draw down the availability of models priced below 40,000?
• 22:18
  SPEAKER_01: Can you elaborate more on that?
• 22:20
  SPEAKER_05: Yeah, I mean, consumers, if we could have more, if we could have more, you know, younger used vehicles out there, it'd be great.
• 22:27
  SPEAKER_05: And then also if we could have more new vehicles priced under$30,000, that'd be great as well.
• 22:32
  SPEAKER_05: Um, if you look at market day supply by overall price, um, and you know what's selling the fastest, it's that under$30,000 price point, is where consumer interest really is for those vehicles.
• 22:44
  SPEAKER_05: And so um we've seen a larger kind of shift over a number of years where automakers seem to be favoring margin over volume.
• 22:52
  SPEAKER_05: And so that's led to an even kind of shrinking of the kind of affordable vehicles out there.
• 22:57
  SPEAKER_05: So vehicles under$30,000, right around 10% of listings right now.
• 23:02
  SPEAKER_05: Um, if you go back a couple years, you know, five plus years ago, vehicles$35,000 or less was 50% of inventory.
• 23:09
  SPEAKER_05: So we've seen a really kind of sharp uh decline in the number of affordable vehicles out there.
• 23:14
  SPEAKER_05: And that's what consumers are really feeling when they go onto a new vehicle lot right now.
• 23:17
  SPEAKER_05: If they're looking for an affordable vehicle, it's a lot more challenging to find.
• 23:20
  SPEAKER_03: Yeah, and this is obviously the impact that the affordability crisis is having in our industry right now, right?
• 23:27
  SPEAKER_05: Yeah, it's you know, I continue to think most consumers view things from an overall monthly payment point of view.
• 23:33
  SPEAKER_05: And you know, if you look at that, average monthly payment continues to go higher and higher.
• 23:37
  SPEAKER_05: And so vehicle prices are one headwind they're facing right now.
• 23:41
  SPEAKER_05: I'm also keeping an eye on the fact that two to five-year treasuries are heading higher.
• 23:44
  SPEAKER_05: The Fed's gonna announce potential interest rate hikes right now, that's gonna have an impact on consumer financing rates.
• 23:51
  SPEAKER_05: 10-year treasury yields are going higher, mortgage interest rates are just gonna get higher and higher.
• 23:55
  SPEAKER_05: And then you look at what's happening with gas prices, too.
• 23:57
  SPEAKER_05: So we've seen a little bit of softening on auto insurance rates, which is positive.
• 24:02
  SPEAKER_05: Um, but overall, a lot of headwinds, not just on vehicle prices, but all the kind of factors combined going into vehicle affordability right now, remain a headwind for consumers.
• 24:11
  SPEAKER_05: Sure.
• 24:12
  SPEAKER_01: As we head into Q4, what are you watching closely and what should dealers be watching?
• 24:18
  SPEAKER_05: Yeah, so a couple different things we're keeping an eye on.
• 24:20
  SPEAKER_05: Uh 2027 model year prices on the whole are higher than 2026's.
• 24:26
  SPEAKER_05: It looks like what we're seeing, the top line number might just be a mix issue right now, but there also remains the factor that we could start to see those tariffs start to pass through more to MSRPs than what we've seen previously.
• 24:39
  SPEAKER_05: The big fear in 2025 was that was going to happen.
• 24:42
  SPEAKER_05: It hasn't really happened yet.
• 24:44
  SPEAKER_05: It could start to happen now.
• 24:45
  SPEAKER_05: Uh, another trend we're keeping an eye on is interest in hybrids.
• 24:49
  SPEAKER_05: Hybrid sales have been really strong so far this year.
• 24:51
  SPEAKER_05: Will that momentum be able to continue?
• 24:54
  SPEAKER_05: And you know, if gas prices continue to head to higher, it could it be even more of a tailwind for hybrids on that front.
• 24:59
  SPEAKER_05: And then uh, you know, on the use side of the market is can you get the inventory that consumers are looking for?
• 25:06
  SPEAKER_05: Um, you know, we've seen a lot of sales growth in two-year-old and younger vehicles.
• 25:11
  SPEAKER_05: We were mentioning A plus.
• 25:13
  SPEAKER_05: And then finally, on the use side, what's going to happen with pricing?
• 25:17
  SPEAKER_05: We've seen average use prices remain at a stagnant level, but above$30,000 for several months now.
• 25:23
  SPEAKER_05: And historically, you know, seasonality-wise, we should start to see some relief on pricing uh on the retail side as we get into the later parts of this year.
• 25:32
  SPEAKER_05: And will that actually pass through with the increasing demand we've been seeing for used vehicles?
• 25:36
  SPEAKER_03: Yeah.
• 25:37
  SPEAKER_03: Um, Kevin, how are you feeling about the last quarter of 2026?
• 25:42
  SPEAKER_05: So, on the use side of the market, from a volume point of view, it should be good.
• 25:46
  SPEAKER_05: We're not seeing any types of shifts we've been seeing in that point of view yet.
• 25:50
  SPEAKER_05: New again remains a little bit of a challenge, and it'll be interesting to see how we're able to navigate the 2026-2027 model year.
• 25:57
  SPEAKER_05: Could be an opportunity for more incentives out there uh to move those 2026 model year vehicles.
• 26:02
  SPEAKER_05: And then one other kind of thing we continue to keep an eye on is the disconnect between consumer sentiment and what consumers are doing.
• 26:08
  SPEAKER_05: Consumer sentiment figures and confidence figures remain quite low, but it hasn't really bled through to overall vehicle sales growth yet.
• 26:15
  SPEAKER_05: So we're continuing to keep an eye on if that trend might just shift at all.
• 26:19
  SPEAKER_03: Sure, sure.
• 26:20
  SPEAKER_03: Um, I don't know if you have this number handy, but you're with car gurus, so you guys have your hand on the pulse of what car shoppers, the number of car shoppers out there looks like.
• 26:29
  SPEAKER_03: Is it the more or less this time last year of those that are hitting your website shopping for vehicles?
• 26:35
  SPEAKER_05: Uh sorry, not a number I have right off the top of my head right now.
• 26:39
  SPEAKER_05: Okay.
• 26:39
  SPEAKER_05: But I mean, if you just look at overall sales volume, but like I said, new sales down slightly, new sales up.
• 26:45
  SPEAKER_05: So I would say that's a pretty consistent trend you've been seeing.
• 26:47
  SPEAKER_03: Sure, sure.
• 26:48
  SPEAKER_03: And I understand too from the uh from your colleagues in the industry that people are staying a little bit longer in the market than previously.
• 26:55
  SPEAKER_03: So somebody was making a decision maybe in in a month or so, and that seems to be now extended somewhat.
• 27:02
  SPEAKER_05: Yeah, it's it's again, if you're a consumer getting into the marketplace right now, it might be challenging to find the exact vehicle you're looking for.
• 27:10
  SPEAKER_05: New new inventories come back quite a bit from where we're from the chip shortage point of view.
• 27:14
  SPEAKER_05: Yeah.
• 27:14
  SPEAKER_05: Um, but again, you know, if you're looking for particular types of vehicles, it might be a little bit more of a challenge to find the price point you're looking for.
• 27:20
  SPEAKER_05: So might might encourage consumers to be looking longer in the market.
• 27:24
  SPEAKER_03: Sure, sure.
• 27:24
  SPEAKER_03: Kevin Roberts, Director of Economic and Market Intelligence for Car Gurus.
• 27:29
  SPEAKER_03: That is an incredible brand.
• 27:31
  SPEAKER_03: And uh you guys get a ton of traffic to your website.
• 27:35
  SPEAKER_03: That's where car buyers start out in many cases.
• 27:38
  SPEAKER_03: So thank you so much for joining us today.
• 27:40
  SPEAKER_03: Appreciate it.
• 27:41
  SPEAKER_03: Thank you.
• 27:41
  SPEAKER_03: Absolutely.
• 27:45
  SPEAKER_03: Great guy knows the market, that's for sure.
• 27:48
  SPEAKER_01: He does.
• 27:48
  SPEAKER_01: He does.
• 27:48
  SPEAKER_03: It's interesting to see that that the market is alive and well for those vehicles that are under thirty thousand dollars.
• 27:54
  SPEAKER_03: Right.
• 27:54
  SPEAKER_03: You know, right?
• 27:55
  SPEAKER_03: So that's that's the target that everybody wants.
• 27:57
  SPEAKER_03: It's a hard car, it's a very difficult car to get um as a used car manager or a dealer to get you know an inventory in in the 20s and 30s, that's for sure.
• 28:07
  SPEAKER_01: And he was talking about shoppers being in market longer looking for the car that they want, yeah.
• 28:12
  SPEAKER_01: Especially if they're looking for a GM hybrid.
• 28:14
  SPEAKER_01: That's right.
• 28:15
  SPEAKER_03: That's right.
• 28:17
  SPEAKER_03: Because there's not a GM hybrid.
• 28:19
  SPEAKER_03: There's one, unless you want a Corvette.
• 28:21
  SPEAKER_03: Right?
• 28:21
  SPEAKER_03: Wow, how did they miss the boat on that?
• 28:23
  SPEAKER_03: Mary Barrett, what were you doing?
• 28:25
  SPEAKER_03: What's going on?
• 28:28
  SPEAKER_03: It's funny that you would think that a company about that.
• 28:31
  SPEAKER_03: That's yeah.
• 28:32
  SPEAKER_01: So Well, you had another clip, I think.
• 28:34
  SPEAKER_03: I do have another clip that I want to share.
• 28:36
  SPEAKER_03: So uh this guy um that I follow on social media, um, and I like to follow him because his his videos are really more for the industry than they are for car shoppers.
• 28:48
  SPEAKER_03: Uh I think he gets a mixture of both.
• 28:50
  SPEAKER_03: But um, I'm always interested to see what he says to salespeople and managers in the industry that follow him and what have you.
• 28:56
  SPEAKER_03: And uh it's a uh uh sales manager out of I think Stuart, Florida at a GMC dealership, which uh, you know, is a big, I think it's GMC Buick maybe dealership, which is pretty big in Florida.
• 29:07
  SPEAKER_03: And uh they do a good volume, they do a great job.
• 29:10
  SPEAKER_03: But uh take a look, take a look at this because I came across it and he he proposes a question to us in the industry, and I want to get your take on this.
• 29:18
  SPEAKER_00: All right.
• 29:19
  SPEAKER_00: So tell me, what do you think about this guys?
• 29:22
  SPEAKER_00: You have an employee, a salesperson, that has a customer that comes in to purchase a car and has a nice traded.
• 29:31
  SPEAKER_00: But the uh the traded doesn't hit the books here, doesn't even get appraised.
• 29:36
  SPEAKER_00: Salesperson makes a side deal with the customer and buys that vehicle directly from the customer.
• 29:44
  SPEAKER_00: What do you guys think about that?
• 29:46
  SPEAKER_00: Is it right?
• 29:47
  SPEAKER_00: Is it immoral?
• 29:49
  SPEAKER_00: Don't you think that the owner that paid millions of dollars for the franchise rights should have the opportunity to buy that car and take it on trade?
• 29:56
  SPEAKER_00: Do you think it's right for a salesperson or a sales manager to do something like this?
• 30:00
  SPEAKER_00: And if so, and if you find out, what would you do about it?
• 30:04
  SPEAKER_00: Does anybody know what this is called?
• 30:06
  SPEAKER_00: Drop it in the comment section.
• 30:07
  SPEAKER_00: For those of you that have been in the car business for a long time, like I have, you know what I'm talking about.
• 30:12
  SPEAKER_00: But I want to hear what you guys got to say.
• 30:14
  SPEAKER_00: Drop it in the comment section.
• 30:15
  SPEAKER_00: I'm gonna be reading and I'm gonna be responding to this one.
• 30:19
  SPEAKER_00: Yes.
• 30:19
  SPEAKER_01: I would be heading right over to the comment section to find out what obviously it's it sounds like that happened to him.
• 30:25
  SPEAKER_01: It did.
• 30:26
  SPEAKER_03: So what did he do about it?
• 30:27
  SPEAKER_03: So I I don't know what he did about it, but I will tell you what most managers will do about it.
• 30:31
  SPEAKER_03: Tell me.
• 30:32
  SPEAKER_03: It's by the way, he said, what do you call it?
• 30:33
  SPEAKER_03: You call it curbing in the auto industry.
• 30:35
  SPEAKER_01: That's so it's a thing, a regular thing that people do.
• 30:37
  SPEAKER_03: Well, it's a regular thing, but you know, salespeople sometimes will do this and uh if they don't care about their jobs, because if they get caught doing it, which usually they get caught doing it.
• 30:47
  SPEAKER_03: What happens is the sales, the the customer will say something to somebody in the dealership, like when they're taking delivery and F and I and they say, Well, I actually sold my car to the salesman.
• 30:55
  SPEAKER_03: Whoa, whoa, whoa, whoa, timeout.
• 30:56
  SPEAKER_03: You did what?
• 30:57
  SPEAKER_03: You know, so that every single dealership out there is looking for great use cars, as we know.
• 31:02
  SPEAKER_03: And now you're in competition with a salesperson that says, Well, I this is this is is exactly what I'm looking for.
• 31:09
  SPEAKER_03: I'll buy this car directly from you, okay?
• 31:11
  SPEAKER_03: And you can just go ahead and pay cash for your your other car or finance it or what have you.
• 31:16
  SPEAKER_03: And uh it's called curving, it's not done all the time, you know, because it is a kind of a moral issue there, but uh but it's not cool, it's not cool to do.
• 31:24
  SPEAKER_03: And and it's you you just as the as the as he pointed out, the dealer has spent millions of dollars on this facility to get that customer in the door, and another few hundred dollars just on marketing to get that customer, and now all of a sudden the salesperson is gonna take that trade in.
• 31:38
  SPEAKER_03: Right.
• 31:38
  SPEAKER_03: That might have been the could have been the gold in the deal.
• 31:40
  SPEAKER_03: Yeah, yeah.
• 31:41
  SPEAKER_03: Maybe maybe the sales manager was gonna take a smaller deal because they're getting such a nice trade.
• 31:45
  SPEAKER_03: We we do look at that in the business, right?
• 31:48
  SPEAKER_03: Um, but in this case, there's only one answer, and and I hate to say this because some of you are gonna get mad at me.
• 31:54
  SPEAKER_03: Fire them.
• 31:55
  SPEAKER_03: I'm assuming that's probably what he did, but I really would like to know what he did.
• 31:59
  SPEAKER_03: Because he didn't wrote him up.
• 32:00
  SPEAKER_03: You know, maybe exactly, exactly.
• 32:01
  SPEAKER_01: If you're watching, you're right, you're right.
• 32:03
  SPEAKER_03: Let us know.
• 32:04
  SPEAKER_03: Reach out to us.
• 32:04
  SPEAKER_03: That's right.
• 32:05
  SPEAKER_03: Maybe he wrote him up, maybe he said never let it happen again.
• 32:07
  SPEAKER_03: Maybe he was a new salesperson, maybe, maybe, maybe.
• 32:10
  SPEAKER_03: The other thing that could be the case, and this is a whole nother uh show or another question, how much do you let your top salespeople get away with?
• 32:19
  SPEAKER_03: Okay, and I'm gonna put that out to you.
• 32:20
  SPEAKER_03: If somebody sells north of 20 cars a month, can they do things that you kind of look the other way and go, well, that guy gets me 25 cars a month.
• 32:29
  SPEAKER_03: I'm not so sure I want to fire him right now.
• 32:31
  SPEAKER_03: Yeah, but little Bobby over here that got out seven cars and he bought the customer's trade, Bobby is done within seven seconds.
• 32:38
  SPEAKER_03: Yeah, okay.
• 32:38
  SPEAKER_03: Yeah, I'm sure it's each store is very different on that.
• 32:42
  SPEAKER_03: It is but it's not necessarily fair.
• 32:47
  SPEAKER_01: But I mean we know they are, but not painting with a broad brush here.
• 32:51
  SPEAKER_03: And in this case, there's only two reasons that somebody buys a car from a customer.
• 32:55
  SPEAKER_03: One is because they they love the car and they're gonna keep it for their family.
• 32:58
  SPEAKER_03: But the most common one is they're gonna buy the car and they're gonna retail it.
• 33:02
  SPEAKER_03: They're gonna sell the car.
• 33:03
  SPEAKER_03: Sure.
• 33:03
  SPEAKER_03: And guess who they're gonna sell it to?
• 33:05
  SPEAKER_03: They're gonna sell it to one, they're gonna sell it to the next customer that comes in at that dealership that's looking for a car like that.
• 33:12
  SPEAKER_03: So it can't be tolerated.
• 33:13
  SPEAKER_03: And uh, but anyway, um, yeah, we'll we'll put this on our website and and our social for you to follow him.
• 33:20
  SPEAKER_03: He's he's a great guy.
• 33:21
  SPEAKER_03: And uh as I said, he talks to us in the industry.
• 33:24
  SPEAKER_03: He also talks to directly to consumers as well.
• 33:27
  SPEAKER_03: But uh, if you're in the industry, he's a fun guy to watch.
• 33:29
  SPEAKER_03: He really is, and he runs a tight ship.
• 33:31
  SPEAKER_01: So So we probably did fire him.
• 33:33
  SPEAKER_03: That's right.
• 33:34
  SPEAKER_03: Or her.
• 33:34
  SPEAKER_03: That's exactly right.
• 33:35
  SPEAKER_03: Or her.
• 33:35
  SPEAKER_03: I think that's it.
• 33:35
  SPEAKER_03: Yeah, it could have been a her.
• 33:36
  SPEAKER_01: Yeah.
• 33:37
  SPEAKER_01: That's right.
• 33:37
  SPEAKER_03: That's right.
• 33:38
  SPEAKER_03: All right, yeah.
• 33:39
  SPEAKER_03: Another show in the history book.
• 33:40
  SPEAKER_01: That's right.
• 33:40
  SPEAKER_01: Thank you so much for joining us today.
• 33:42
  SPEAKER_01: Please join us again tomorrow at noon Eastern.
• 33:45
  SPEAKER_01: We look forward to seeing you then.
• 33:46
  SPEAKER_03: That's right.
• 33:46
  SPEAKER_03: And if you've enjoyed our show, which we hope you did, we'd love to uh have you share it and of course um share with all your you know, team members and colleagues and everyone else in the industry.
• 33:56
  SPEAKER_03: And don't forget to like and comment and subscribe to our newsletters and also our social media platforms here.
• 34:03
  SPEAKER_03: So I really appreciate it.
• 34:04
  unknown: Yep.
• 34:05
  SPEAKER_03: Thanks.
• 34:06
  SPEAKER_03: Have a great day.